The power of informal institutions: evidence from the impact of religious culture on corporate green governance in China

This article explores the significant role of informal institutions, particularly religious culture, in shaping corporate green governance (CGG) in China. It investigates how religious culture, alongside formal environmental regulations, influences corporate environmental management strategies. The study focuses on the impact of religious culture on corporate pollution discharge fees and environmental information disclosure, providing empirical evidence from Chinese A-share listed companies in high-polluting industries. The research employs innovative instrumental variables and robust empirical methods to establish a causal relationship between religious culture and CGG. It highlights two key mechanisms: the faith effect, which enhances corporate social responsibility, and the organizational effect, which raises regional environmental awareness. The article also examines the interaction between informal and formal regulations, revealing a substitution effect that underscores the importance of leveraging religious culture in environmental governance. The findings offer valuable insights into the role of informal institutions in promoting sustainable corporate practices and provide policy implications for integrating religious values into environmental strategies.